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IT Stocks Outlook for the week – 02 to 06.11.2015 Range-bound next week; Tech Mahindra may lend cues
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( www.rupeedesk.in )
Earnings of major companies for the quarter ended September will set the trend for
equities next week, with investors also keeping an eye on the exit polls for the Bihar
election on Thursday. The bias for the broad market is likely to be weak, especially after
the National Stock Exchange's Nifty erased gains in the second half of the session
yesterday to end down 0.6% at 8065.80 points. The S&P BSE Sensex ended down 0.7%
at 26656.83 points. The way markets closed on Friday, we expect decline to continue on
Monday as well, mainly in midcap and small cap space. So, traders should better trade
with strict stop losses or hedge the positions otherwise damage could be severe.
However, if earnings of major companies are good, the rebound in the index may take the
Nifty towards 8180-8200 points. With polling in the Bihar Assembly elections ending on
Thursday, exit polls will be a key indicator of the next ruling party in the state. A win for
the Bharatiya Janata Party will boost sentiment as it will mean higher representation for
the party in the Rajya Sabha, where key bills such as the constitutional amendment to
introduce the Goods and Services Tax are stuck.
Earnings of Nifty constituents--Cipla, Oil & Natural Gas Corp, GAIL India, State Bank
of India, Bank of Baroda, Punjab National Bank, Tech Mahindra, Bharat Heavy
Electricals, Adani Ports and Special Economic Zone, Bosch, and Power Grid Corp of
India--will also be in focus next week. Public sector banks and oil and gas companies'
will be the major earnings to watch out for next week. With some major public sector
banks reporting their Jul-Sep earnings, the Bank Nifty is seen finding support at 16600
points and facing resistance at 18000 points. The analyst expects the bias for the index to
be negative.
Yesterday, the Bank Nifty ended up 0.8% at 17354.50 points aided by gains in ICICI
Bank and Kotak Mahindra Bank due to robust Jul-Sep earnings. Among stocks that were
in focus yesterday, Larsen & Toubro is seen extending its decline next week after it fell
over 4% to 1,410.75 rupees as the engineering major sharply cut its order inflow growth
guidance for the current financial year to 5-7% from 15% earlier. After falling 4.4% to
334.65 rupees, ITC is seen weak after it reported a flat net profit growth for Jul-Sep at
24.31 bln rupees, lower than analysts' estimate of 26.15 bln rupees.( www.rupeedesk.in )
